What Controls the World?

[Back to Politics]


You can stop worrying about the danger of Artificial Intelligence taking over the world: it has already happened.  The world is run by organizations - businesses, multinational corporations - which operate according to their own systems and logic.  Many of them are legally people but, despite the many people working within them, they are - quite literally - not human.  They are inhuman creatures, entities which we have created but cannot control, and they run the world.


When you look at the inventions whch have shaped the modern world, one of the most significant was the creation of the limited liability company.  This originated in England, with Monasteries and Guilds in the 15th century, and developed into joint stock charters in the 17th century - the success of one of the earliest, the East India Company, founded in 1600, inspired many others.

These companies are 'limited liability' because many people have a share in their ownership (the 'shareholders'), but the company exists independently of them, and while they may receive an unlimited return on their investment if all goes well, if things go badly they will only lose their investment.  This produces an incentive for the company to undertake risky behaviour in the hope of generating great profit for the shareholders, because the cost of failure is comparatively small.

This new kind of creature has always been viewed with some suspicion - power without effective accountability is always dangerous - but they made lots of people rich, and rich people have friends and influence.  And, on the whole, they brought obvious and significant benefits to the nation state, so you didn't want to lose out: the Dutch East India Company was founded in 1602, and rapidly outgrew its English model.

The Modern World

While these companies were operating across the world but run from one country, they were subject to the law of that country.  But there are different laws and different taxes in every different country, so over time they naturally developed a distribution of their activities which maximized their profits.  And in the modern world with computers and telecommunications, it makes very little practical difference how close the legal and financial functions are to the profit-making activity.  You employ people where the cost of employment is low, manufacture where the cost of manufacturing is low, and pay taxes where the corporation tax rate is low.  And that is before you negotiate with the relevant government to provide incentives (generally in the form of grants and tax relief) to persuade you to invest in their country by building your next factory or establishing your next research division there.

To give just one well-publicized example: in 2012, it was reported that Starbucks had paid no corporation tax in the UK since 2009 despite sales of £1,200m.  Many people reacted to this news by accusing Starbucks of doing something wrong, but they were operating perfectly legally.  They paid all the tax required by UK law: if the result is not acceptable, then the answer is to change UK tax law.  But we can't do that - partly because there will always be loopholes to exploit while different countries compete to be more attractive to the multinationals, and partly because they can simply pull out of the UK if they don't find it rewarding enough to operate here.

I remember when I was young and naive in my early teens, arguing in the playground that the United Nations would inevitably rise in power and importance, as the nation states learned that the only way to protect themselves from exploitation by the multinationals is to band together and agree binding international taxation standards.  It seemed inevitable at the time.  But, somehow, the multinational have continued to divide and conquer.

One major reason why so many people are disillusioned with politics these days, I suspect, is because politicians have very little real power.  Despite what they claim and promise, they are operating in a world which is largely run, not by nation states, but by dictators and multinationals.  Elected politicians have very little real room for manoeuvre.

So we are now living in a world which is largely run by multinational corporations, which are not subject to the laws of any country.  Their activities in each country are, of course, subject to the laws of that country, but if they want to do something which one country deems illegal, they can often find another country where it is permitted.  They can pick and choose which laws they want to keep, and which taxes they want to pay.


You can argue, if you like, that multinational corporations are not artificial intelligences.  But they exist, and they act, and they have their own systems and logic which we have created.  If you don't recognize this as artificial intelligence, I suspect that this is probably because the media has sold you a story of what AI will be if (or when) we succeed in creating it.  And the media is largely controlled by the multinationals, so they may not be highly motivated to tell a different story; it's much better for them if we just let them get on with whatever they want to do.

Multinationals exist purely to make a profit for the shareholders.  They have a life of their own, and unlike (many of) the people working within them, they have no morality, and no greater sense of purpose.  They are, quite literally, inhuman and amoral creatures, with great power, which we have created and now discover that we cannot control.

At least, we cannot control them in the same way that we can control people and small, local companies.  They can be affected by public opinion - Starbucks responded to the negative publicity and now pays some corporation tax in the UK.  But public opinion is unpredictable and fickle, and to a large extent, we can't even agree what moral standards we would like the multinationals to comply with.

So I come back to the schoolyard discussions: we, the nations of the world, have a choice.  We can continue to allow the multinationals to divide and rule us, or we can start to work together - we can accept that we need one another, that we are stronger together, and only through international cooperation can we hope to tackle the challenges which face us.


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